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Saturday, January 24, 2009

I was very taken with the remark by Mr. Kenneth D. Lewis (CEO of The Bank of America) that his company was being patriotic in closing its bid for Merill Lynch despite the latter firm's staggering losses (New York Times, January 17, 2008: B1, B8.)

I wonder how else a patriotic firm might act and how government might encourage patriotism -- though of course it should not need to do so.

First, a patriotic company would not lay off employees. Rather it would achieve cost cutting through the reduction of pay and hours for all employees in the company from CEO to the assembly line or office worker.

Second, a patriotic company would use slack time to give employees further training: training to do their own jobs more effectively, or cross training to help them learn other existing jobs, or learning in preparation for the jobs that will be needed if the firm takes a new strategic direction when the crisis is past.

Third, a patriotic company would work with, talk and listen to its employees to develop new products and new processes that would contribute to the long term effectiveness of the firm.

The role of government in the current crisis is to extend the availability of short-time unemployment benefits. This allows the worker on reduced hours to pick up an unemployment insurance payment for those lost hours.